City officials in many New York communities are spreading thick the corporate welfare for large scale retailers. In New Rochelle, New York, local residents are fighting City Hall’s attempts to wipe out 14 acres of homes and small businesses located near Route 95, asphalting the way for a 270,000 s.f. IKEA furniture store. City officials have declared the area “blighted”, allowing them to consider the land part of an urban renewal project. IKEA already has a store in Elizabeth, NJ and Hicksville, LI, and this third store in New Rochelle would triangulate the metro New York City area. The city has conducted a $35,000 study which concluded that the area was blighted. IKEA paid for the study. The Swedish company claims it will bring 350 to 500 jobs to the community, and $1.7 million in sales taxes. Untallied is the loss of sales and property taxes caused by the destruction of the City Park neighborhood and businesses. Residents point out that there are already 50 small businesses and industries in the area that employ as many as 450 stonecutters, electricians, car mechanics and workers who earn far more than a clerk at IKEA. This project entails possible land-taking of 79 properties, including 34 homes and 2 churches. The City Park Association has called IKEA a “Swedish bully” for pursuing the project, and local residents have promised to chain themselves to the bulldozers if IKEA keeps pushing their bad idea on the city. Mayor Tim Idoni says he “sympathizes” with residents, “but we have to do what’s best for all of the city’s residents.” The City has no cost/benefit analysis that shows the Mayor has numbers on his side. But the Reverend Ben McKnight of St. Paul’s church says “we’re moving from a God-fearing community into a community that just loves money.” And the city of New Rochelle is apparently willing to give IKEA lots of financial incentives underwritten by local taxpayers. New Rochelle has already used its property tax exemption incentives to let companies like Home Depot and Costco get a 50% break on their property taxes. This has cost New Rochelle nearly half a million dollars in revenue a year, according to The Journal News. This tax abatement plan has been going on for 20 years in New Rochelle, but the Mayor now says he might end the corporate giveaways. The exemption has allowed Home Depot to get a 50% cut in school, city and county taxes for the first year, and then the taxes increase by 5% of the property’s value for the next nine years. IKEA would qualify for the same abatement unless the use of the state law is ended. Columnist Phil Reisman called this deal an “unholy partnership of big business and government, forged through a warped interpretation of eminent domain.” “It generates a lot of money for everybody but the people who are targeted for displacement,” Reisman says.
This “unholy partnership” is at work in Port Chester, NY, where city government wants to wipe out 42 existing businesses to make way for a Costco warehouse, a cinema, and other suburban oddities. Mt. Vernon, NY is planning to use eminent domain to clear out a soft drink distribution center to make way for a Target. White Plains and Spring Valley, NY have similar plans underway. This kind of tax giveaway, that helps write down the cost of the land, frustrates many people in these communities. “The fact that we have to give up our homes and our businesses for another business, it doesn’t make sense” said one 77 year old residents of the City Park “blighted” area. “I don’t think it’s morally right.” Another resident added: “I think it’s disgusting to have a church move to help some people sell some furniture.” Ironically, New Rochelle is spending tax dollars to uproot local taxpayers, and leave them without without a chair to sit on. The project has not yet gone through its state environmental quality review process, but city officials are pushing hard for approval. In other states, residents have challenged the use of urban renewal tax breaks for retail projects, insisting that such incentives only be used for industrial purposes. For more details of IKEA’s bad idea, contact Paula DeCaro, at the New Rochelle League of Women Voters: 914-633-7097.
